This opinion will be unpublished and

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. ? 480A.08, subd. 3 (2010).

STATE OF MINNESOTA IN COURT OF APPEALS

A12-0430

In re the Marriage of: Andrew Jay Redleaf, petitioner and judgment debtor,

Appellant,

vs.

Elizabeth Grace Redleaf, judgment debtor, Respondent.

Filed October 22, 2012 Reversed and vacated

Hooten, Judge

Hennepin County District Court File No. 27-FA-07-3480

Alan C. Eidsness, Stuart T. Williams, Henson & Efron, P.A., Minneapolis, Minnesota (for appellant)

Mark J. Briol, Morgan R. Smock, Briol & Associates, PLLC, Minneapolis, Minnesota; and

Nancy Zalusky Berg, Allison Maxim, Walling, Berg & Debele, P.A., Minneapolis, Minnesota (for respondent)

Considered and decided by Worke, Presiding Judge; Hooten, Judge; and

Toussaint, Judge.

Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, ? 10.

UNPUBLISHED OPINION HOOTEN, Judge

Appellant challenges the district court's order holding him in contempt for failing to comply with a discovery order, claiming that the district court lacked subject matter jurisdiction and failed to afford him required criminal protections. Respondent agrees that the district court's contempt order improperly held appellant in constructive criminal contempt and must therefore be reversed and vacated. Respondent requests the matter be remanded to permit the district court to fashion a conditional contempt order based upon a likelihood that she will have to obtain future judgments against appellant. Because respondent has conceded that she is no longer seeking discovery from appellant and the district court has already denied respondent's request for a conditional contempt order, we reverse and vacate the district court's order of contempt against appellant and deny respondent's request for a remand to the district court.

FACTS Appellant Andrew Jay Redleaf and respondent Elizabeth Grace Redleaf were married in April 1984 and were divorced in February 2008 after entering into a marital termination agreement (MTA) setting forth the terms of a property settlement. The underlying facts pertaining to the dissolution are set forth in prior decisions of this court. At the time of their dissolution, appellant was chief executive officer and owner of Whitebox Advisors, LLC (Whitebox). The MTA provided that "respondent would waive her interest in the businesses in exchange for $140,750,000 in cash payments." Redleaf v. Redleaf, 807 N.W.2d 731, 732 (Minn. App. 2011). Respondent was to receive two lump-

2

sum payments totaling $20,750,000 on or before February 15, 2008, and one lump-sum payment of $30,000,000 on March 15, 2013, with the remainder being paid in "monthly installments of $1,500,000 over a five-year period beginning on March 15, 2008." Id. Appellant personally guaranteed the property settlement. Id.

After paying respondent monthly installments from March 15, 2008 to January 2009, appellant moved to reopen the judgment because of a change in his financial circumstances. Id. We affirmed the district court's decision to deny appellant's motion to reopen the dissolution judgment because appellant failed to show that prospective application of the MTA was inequitable. See Redleaf v. Redleaf, Nos. A09-1805, A092360, A10-10, 2010 WL 3543458 (Minn. App. Sept. 14, 2010).

Thereafter, appellant missed additional monthly payments. Redleaf, 807 N.W.2d at 732. On October 4, 2010, judgment was entered against appellant in the amount of $4,500,000 with the statutory interest rate of ten percent. Id. at 732?33. Respondent obtained additional judgments totaling $4,500,000 for October through December 2010, $3,000,000 for January and February 2011, and $1,500,000 for March 2011, all with the statutory post-judgment interest rate of ten percent. Id. at 733. As of August 25, 2011, judgments against appellant had been entered in favor of respondent in the principal amount of $8,985,429.87, with interest due on the judgments totaling $160,442.99.

On March 21, 2011, respondent served appellant with requests for documents and interrogatories in aid of execution pursuant to Minn. R. Civ. P. 69. Appellant failed to fully respond to these requests and respondent filed a motion to compel discovery.

3

On August 3, 2011, the district court signed an order compelling appellant to

comply with discovery by August 26, 2011, finding that respondent's discovery requests

sought information relevant to the enforcement of the judgments against appellant, as

well as other related issues such as whether appellant had attempted to hide or dissipate

money by transferring it to third persons or used his business entities as an alter ego. The

district court also noted that the requests were relevant to determine whether appellant's

financial disclosures violated Minn. Stat. ? 550.011.1 However, on August 26, 2011, the

parties filed a stipulation and order representing that:

Respondent received a check from [appellant] in the amount of $9,145,872.86 which the parties agree shall satisfy in full the remaining amounts owed, including accrued interest thereon through August 25, 2011, on the judgments entered on August 3, 2009, June 21, 2010, July 27, 2011 (all three), and also shall satisfy the $1,500,000.00 payment which [appellant] was obligated to make to [r]espondent on August 5, 2011, which he has not yet made, plus accrued interest thereon through August 25, 2011.

Respondent filed a satisfaction of judgment for each of these judgments in compliance

with this agreement, but did not request immediate enforcement of the discovery order.

1 "[I]f a judgment has been docketed in district court for at least 30 days, and the judgment is not satisfied, the judgment creditor's attorney . . . may or the district court . . . shall, upon request of the judgment creditor, order the judgment debtor to mail . . . to the judgment creditor information as to the nature, amount, identity, and locations of all the debtor's assets, liabilities, and personal earnings." Minn. Stat. ? 550.011 (2010). Failure to comply "may result in a citation for civil contempt of court." Id. Respondent argues that the stipulation would not have had any effect upon the mootness of the discovery order as it relates to the allegation that appellant failed to identify assets in financial disclosures under section 550.011. Even if this were correct, there has been no appropriate proceeding to hold appellant in civil contempt with regard to this issue in district court. Respondent also does not argue that this issue would be addressed in any manner on remand.

4

Thereafter, on November 8, 2011, after obtaining attorney fees as sanctions pursuant to Minn. R. Civ. P. 37.01(d), respondent filed a motion for additional sanctions pursuant to Minn. R. Civ. P. 37.02 due to appellant's noncompliance with the discovery order. Respondent requested an

order, as a sanction under Rule 37.02, that if [appellant] reverts to his old ways while still in noncompliance with the discovery order, he will then pay a daily fine to the Court of $10,000 until he complies with the discovery order, and will face a civil contempt proceeding if such fines do not prove sufficient to induce his compliance. In response, appellant filed a motion for a declaration that his satisfaction of the outstanding judgments rendered the discovery order unenforceable. He argued that the district court lacked jurisdiction and authority to grant respondent's motion for additional sanctions because she had executed and filed satisfactions of judgment relative to any previously unpaid property settlement installments due and owing under the MTA. The district court imposed sanctions under Minn. R. Civ. P. 37.02, noting appellant's history of failing to make timely payments under the MTA and his failure to produce any of the ordered documents and interrogatory answers in direct contravention of the discovery order. The district court concluded that the discovery ordered was not rendered moot by the stipulation but refused to issue an order imposing future sanctions as requested by respondent. Rather, the district court concluded that appellant was in "civil contempt" given the admission of his attorney that he did not comply with the discovery order and the previous finding that such failure was not substantively justified. The district court concluded that the only purge condition was for appellant to "make

5

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download